Daily Brief: Coinbase Boldly Goes Where Bitcoin Has Gone Before

Daily Brief: Coinbase Boldly Goes Where Bitcoin Has Gone Before

almost 3 years ago3 mins

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Coinbase reported its first quarterly results on Friday since hitting the US stock market last month, and the crypto exchange teased even better things to come.

What does this mean?

Whoa mama: Coinbase’s revenue more than tripled from the quarter before and surged almost tenfold from the same time last year. That led to a 300% uptick in the company’s profit from the quarter before. Still, it shouldn’t exactly be a shock: crypto prices have been booming, and investors have been tripping over themselves to trade the digital rascals on Coinbase’s platform. So many investors, in fact, that its total number of monthly active users more than doubled from the quarter before – from 2.8 million to 6.1 million.

Coinbase profit

Why should I care?

Zooming in: Where bitcoin goes, Coinbase follows.

Coinbase makes almost all its revenue from trading fees, and since most of those trades are in bitcoin, the company’s success is closely linked to that of the OG crypto. So it can’t have gone down well when bitcoin’s price tanked the day before its earnings announcement, right after Tesla announced that it’d stop accepting the crypto as payment. The EV-maker’s Technoking cited environmental concerns, and he’s not wrong: bitcoin mining uses more electricity than most countries do. And if other eco-conscious companies make the same pledge, bitcoin – and by extension Coinbase – could well take another tumble.

Bitcoin price volatility

For markets: Such cryptocurrencies. Very competition.

Coinbase’s stock is down more than 30% from the peak it hit on its first day of trading, but it’s not all down to Elon’s tweets. Coinbase has also been facing increased competition from platforms that offer a more diverse range of cryptocurrencies. Cryptocurrencies like dogecoin, the meme-inspired former joke that’s up almost tenfold in the last three months. So now Coinbase wants in: the firm said on its earnings call that it finally plans to list dogecoin in the next two months. So wow.

Coinbase stock
Source: Google Finance

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Travel Demand Is On The Rise, And Airbnb Is Taking Advantage

Airbnb image

Looks like people are finally getting outnabout again: online travel platform Airbnb booked quarterly revenue that beat analysts’ expectations, initially sending its shares up 2% on Friday.

What does this mean?

Vaccine rollouts sure are proving a shot in the arm for Airbnb. With travel restrictions gradually lifting, the company’s global bookings were up 13% last quarter compared to the same time last year. Unlike a trip to Venice in peak tourist season, that was even better than investors had imagined – and a welcome change after a solid year of declines.

Airbnb booking
Source: The Wall Street Journal

The value of those bookings was also higher than expected as customers treated themselves to more expensive trips – with non-urban and whole-family vacations in particular more popular than usual. The only downer was Airbnb’s profitability, which fell well short of estimates as the company repaid some of the hefty debt it took on at the height of the pandemic.

Why should I care?

For markets: IP-whoa there.

Travel demand may be rising, but Airbnb’s five-month-old stock price is over 30% below its mid-February highs. True, there’s been a broader tech selloff, but other recent stock market debutantes – including DoorDash and Coinbase – have done particularly poorly recently too. Whether that’s because investors are worried about inflation or just because they realized they got a bit ahead of themselves, they might now be a bit more measured about upcoming market listings.

Travel stocks

Zooming out: Not another box set.

One company that’s less happy about families leaving the house again is Disney, which admitted late last week that its formerly fast-growing Disney+ streaming service attracted fewer new customers than expected last quarter. While Mousecorp maintains it can more than double subscriber numbers to a Netflix-esque 260 million by 2024, Disney+ will also need to improve its average revenue per customer. That’s currently less than half that of its streaming rival, which is only now generating enough cash to actually fund its operations.

Disney subscribers
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